Financial Literacy Exam term 2 2025-2026

Money personality

the way you view and handle your
money and any financial decisions you need to make

Avoider

The type of money personality where you put off making money decisions

Colllecter

The type of money personality where you like to see your money make money

Spender

the type of money personality where you enjoy spending and think little about how to pay for your purchases

Thinker

the type of money personality where you care about others who have less than you do, and you often feel guilty about having more than they do

miser

the type of money personality where you like to save every penny and you do not enjoy spending money

Tradeoff

When we decide to spend or save our money on something, that is money that we also have decided will not be saved or spent on something else

Savings account

A type of account at a bank or credit union
where you can safely keep your money. For most people, this is their first type of bank account. Money earns a little bit of
interest and is accessible when you want to make a withdrawal

Withdraw

The act of removing some or all of your
money from a bank account

Comparison Shop

the idea that you research how to make the best purchase that reflects what you value (style, flavor, brand, etc.), meets your needs (reliability, appropriateness, etc.), and fits within your budget

Deposit

The process of putting money into an account

Direct Deposit

Is when your employer automatically puts your paycheck into a bank account

Overdraft

Occurs when money is withdrawn from a bank account and the available balance goes below zero

Income

Earnings from work or an investment

Spending Diary

Your personal tool to track your spending over a period of time so you can see where you spend your money, allowing you to effectively budget for future spending and saving

Account register

Your personal tool to keep track of one specific bank account transactions

Bank Fees

Bank charges that may be attached to your account

Bank Statement

The bank’s record of all of the transactions in your account

reconcile

To compare the bank’s statement with the account register to determine account
balance and to make sure they match!

Transaction

Any time you spend money from your account or add money to your account; also, anytime a bank fee is subtracted from your account or interest is added to your account

Budget

A plan of your expected income and how you will use it to meet your expected expenses over a period of time

Monthly Bills

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Needs vs. Wants

Needs
Expenses that are essential for you to be able to live and function

Wants
Expenses that help you live more comfortably

Gross Pay

Total Earnings before any deductions are taken

Net Pay

Total earnings after payroll taxes and other deductions have been taken out; also called take-home pay

Deductions

Any items subtracted from your paycheck, including state and federal income taxes, Social Security, health insurance, or 401K contributions

50/30/20 rule

A budgeting method that allocates 50% to needs, 30% to wants, and 20% to savings and debt repayment

Loan

an agreement where you are credited with a fixed amount of money/interest for a fixed period of time

Interest

the amount you will owe as a cost of borrowing money from someone or some business. It's typically represented as a percentage.

Credit Card

a plastic card that allows you to make purchases with borrowed money, which then you must repay the lender in one lump or sum in monthly payments with interest

Debit Card

a card that is directly connected to your checking account. It enables you to conduct ATM transactions and to make purchases instead of using cash or writing a check.

Lender

a person or company who loans money

Annual Fee

the fee charged by a credit card company every year for the use of the card

Credit Limit

the maximum amount of money the lender is willing to loan an applicant

Finance Charge

the total cost of using credit, including interest and fees

Minimum payment

credit card companies want you to be only able to afford a part of your bill this way they aren't interest and get rich of your decision

Grace period

the length of time that the lender charges no interest on money borrowed when paying off your balance in full each month

Introductory rate

lower interest rate offered by credit card companies usually for a short period of time to entice you to sign up for credit with them

Credit score

a measure of an individual's credit risk and ability to pay debts

Credit report

Report showing your credit payment history

Loan Term

length of time you have to pay the loan

Foreclosure

process by which the bank holding the mortgage takes back the home that owner has failed to make payments on

repossession

process of a lender, taking something back most often in a car for failure to make payments on

Bankruptcy

a legal procedure when dealing with debt when an individual or business cannot repay when they owe

Delinquency

broadly, refers to a borrower, not being current on his or her payments

Garnishment

a court ordered attachment that allows a lender to take the money owed directly from a borrowers paycheck

Apr

the cost of credit the cost is based on an annual percentage of balance owed

Bond

Loans of money to a business or government

Liabilities

anything we owe

Assets

anything of major value that we own

Net Worth

everything we own of major value minus everything we owe. The big picture.

Stock

represent small ownership in company that we own.

Insurance

A contract that offers full or partial financial compensation for loss or damage caused by an uncontrollable or catastrophic event.

Premium

The money you agree to pay in order to have insurance coverage. Are paid monthly, yearly, and quarterly.

Claim

when something unexpected, uncontrollable, or catastrophic happens and you need to report it to your insurance in order for your policy to help you pay for the expenses associated with the event

Share

small ownership in a company

Three reasons young people should save

1. You can save for big purchases (like a car!)

2. You can save for your college education

3. You can save for emergencies (like a broken phone!)

Three reasons adults should save

1. Saving for emergencies avoids taking on debt (credit cards) when unexpected things happen like an appliance breaking down or a car accident

2. You can save for a down-payment on a house or a car in order to minimize the loan you will need

3. If you lose your job or want a career change, you can support your family and lifestyle while you search for a new job

What does pay yourself first mean?

After you pay for your needs, “pay yourself” by immediately transferring some money into your savings account before you pay for your wants

Why might something appear on your account register but not you bank statement? Give an example

the check has not been cashed, deposited, or recieved.

Why might something appear on you bank statement but not your account register? Give an example

There was a payment or cash withdrawal that you forgot about and didn't put it on your AR. Or Bank Fees.

Why is it important to reconcile your bank statement and your account register?

To see if things are different.

Why might the names be different on your bank statement and your account register

You bank statement names will be different because they will use formal names and you will most likely use the name you call it. for example Bank Key bank

College Degrees

Associates, bachelor's, masters, Doctorates

Reasons to attend community college

1. Someone who wants to learn something new.

2. Someone whose career path only requires an associate's degree.

3. Someone who wants a less expensive way to start their bachelor's degree.

Factors that affect your monthly premiums for Auto Insurance:

Age, gender, Where you live, Driving Record

Factors that affect your monthly premiums for Life Insurance:

Age, gender, Health history, Tobacco use, occupation

Factors that affect your monthly premiums for Health Insurance:

Age, Where you live, Tobacco use, Individual vs. Family enrollment

Factors that affect your monthly premiums for Homeowners Insurance:

Deductible, dog breed, Where you live, Credit score/history

College Paths:

4 year degree, Medical Field trade schools

Pay Period

YTD year to date